BitMEX Report Questions EOS Blockchain as a Real Viable Ethereum (ETH) Challenger

Since its remarkable ICO of 2017, EOS has been hinted at as a possible challenger to the dominance of Ethereum in the dApp world. But while it has its fair share of supporters, it's not slacking with reference to detractors either.

BitMEX, which operates as a Bitcoin/Dollar derivatives market based out in the Seychelles has recently released a meticulous report on the nature of EOS. As many detractors would expect, and supporters have feared, the results don't bode well.

In the report, BitMEX concluded that there would need to be a significant level of redesigning required if it ever wants to realize its long-term goal of functioning as some form of globe-trotting computer.

Distributed Database System

We'll go on and begin with one of the most damning things to highlight from the report, which is something we only touched on briefly. And that is that BitMEX conclude that EOS is not technically a blockchain based network at all. Instead, its operations strike more of a resemblance to a ‘distributed database system' as opposed to its lauded rival, Ethereum.

The latter, for example, Ethereum: actions performed through smart contracts are cryptographically validated and indelibly recorded via its blockchain, this is done by actually changing the blockchain's state.

To begin with the most damning thing – BitMEX says that EOS is not, in fact, a blockchain-base network at all. Its operations are more similar to a ‘distributed database system’. This system stands in direct contrast to the way in which EOS performs. EOS transactions do not result in any kind of state change on the blockchain, instead, only the database recorded upon it is.

It's believed that this come back to EOS primary aim, which is to be a more optimized, generally better version of Ethereum. By that, we mean that it alleges to be capable of handling far more transactions per second. However, BitMEX found that EOS

“does not alleviate congestion, though rather circumvents it.”

In addition to this, BitMEX discovered that while EOS is able to exceed 15 transactions per second, which is the rate that is currently available through Ethereum:

“…the transaction throughput in the system does not exceed 250 TPS even in optimal settings… During tests with real world conditions … performance dropped below 50 TPS putting the system in close proximity to the performance that exists in Ethereum.”

EOS' Concentration of Power Vs Others

Out of all the areas that are covered by MitMEX's report, it focuses a lot on the 21 block producers previously mentioned. In a blockchain that uses the more classic Proof-of-work mechanism such as Ethereum, all transactions are recorded on its distributed ledger. Consequently, this is made visible to all nodes on the system.

With EOS, its 21 producers do this. These respective nodes are voted in by its community of users, all of which have staked a certain amount of tokens which reflect their votes.

News outlets have had discussions in the past regarding these block producers, theorizing that they're all major companies that run large-scale (for EOS) publicity campaigns in order to obtain the number of votes needed to retain their position for a long stretch of time.

Since these reports, it was found that this was far more than just theory, and BitMEX has added to that, discovering that the capacity for corruption within EOS is far more likely and far deeper than previously realized.

The block producers are responsible for hosting, delivering, and managing “most of the resources consumed by the clients.”

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